IP Video Not Yet a Slam-Dunk for Cable

DENVER – Cable Next-Gen Technologies & Strategies – A combination of technical and market factors is making cable’s move to IP-based video a bit haphazard, with some operators such as Comcast zooming ahead and others struggling to see the business case for the move.

That was one general conclusion reached by a panel of experts here last week. On the impressive side of the scale is Comcast Corp. (Nasdaq: CMCSA, CMCSK)’s accomplishment — 12 million IP video customers consuming 13,000 linear TV channels, 150,000 hours of on-demand content, all in IP, said Neill Kipp, distinguished engineer, Comcast Video IP Engineering and Research.

But even Kipp didn’t downplay the level of investment that Comcast has made to accomplish that feat, with multiple transcoder farms and a content delivery network currently handling 6.2 terabits of video traffic.

In general, the panel agreed there are market forces pushing cable toward an all-IP future, including the need to compete with streaming video, even as challenges on the set-top box and network infrastructure fronts hold them back.

As Brent Smith, president and CTO of Evolution Digital LLC , noted, there is a legacy installed base of set-top boxes deployed today that will need to be replaced if they are to handle IP video, and many smaller companies simply can’t justify that investment.

“With the exception of X1 and Spectrum [Comcast and Charter services, respectively] STBs, TiVo is the only IP-capable set-top box out there,” Smith said. Add to that the complexity of integrating gear from multiple vendors and the prospects are even dimmer, he said. That’s why Evolution Digital developed end-to-end IP video solutions that it is marketing to cable operators, Smith added.

Some smaller cable operators have chosen to get into the digital video arena by partnering with TiVo Inc. (Nasdaq: TIVO) and enabling their customers to access Internet-based video streaming services, such as Netflix, Amazon Prime and Hulu, on cable-enabled set-top boxes. The challenge there, according to the panel, is that easier access to OTT video could cannibalize the cable company’s traditional linear video services and additional revenues for things like on-demand content.

There are, however, distinct advantages to IP video and market forces that are pushing cable operators in that direction, notably the drive to “skinny bundles,” which let cable operators sell smaller packages of their content to consumers at lower prices. The move to IP video would give cable operators an easier and more flexible approach to creating and delivering those bundles.

“This can be a much more affordable way for cable operators to take back control” of the IP video space, Smith said, noting his company is developing an STB with both cable and IP features. “Operators have the rights to all this content,” including local origination content, “but we need to give them the right tools.”

IP video can create a strain on the network, added Scott Geba, chief architect, cable MSO accounts, at networking gearmaker Arista Networks Inc. “Cable operators are being forced to build an infrastructure that’s different — for them, it’s a new space and it’s pushing the paradigms of basically how different parts of company interact with each other.”

There is a growing base of applications that may make that effort worthwhile, he noted. But that also means cable players “need to build a network that will grow with what apps need in the future,” Geba said. He urged providers to consider their network investments holistically, and build out their networks so that it’s possible to scale to future needs.

Tom Wirth, senior vice president of Nagra , noted that likely means a much more robust IP video network than what cable operators might be used to. “This isn’t what you use to provide training videos,” he noted, pointing to Comcast’s investment in “a carrier-grade IP network.”

The good news there is that the technology to deliver all of the bandwidth needed gets cheaper all the time, Arista’s Geba noted. “100 Gigabit ports are so cheap, we just skipped 40 gigabits and went straight to 100,” he said.

“From a theoretical perspective, you could have a PVR to every outlet in the home,” he said. “Once you push everything back to the data center, there is no limitation in the home, no conflict in the home.” The IP-based devices are simpler and consume less power than legacy set-tops. “The more you can bring over to the Internet world, the cost curve on memory, the cost curve on everything, goes down,” he said.

Comcast’s Kipp agreed that there hasn’t been any kind of bandwidth bottleneck for its cloud-based DVR service. Storage, on the other hand? That’s a different issue.

“Our CDN can’t cache your single copy — it’s against the law – so we pass that right through into your house,” he said. “That’s the scale of our cloud DVR solution.”

In fact, Comcast’s cloud DVR solution requires the MSO to have regional storage facilities with 16 petabytes for storage — essentially, ten racks of storage for every one rack of compute, for 640 petabytes of total storage. “It took more than a year to rack all the storage,” Kipp noted, adding that if you used half-inch terabyte drives to contain that storage, the stack would be five miles high.

There are other options for storage in the home, of course, which would get around the copyright issues. Western Digital Corp. (NYSE: WDC)’s Enosh Levi, director of marketing, noted that it’s still possible to keep DVR functionality in the cloud, but store the video content in low-cost Flash memory devices on site, thus getting around the need to build massive amounts of storage in the network.

It is also possible to keep some content, such as linear channels, in QAM and not convert them to IP, Smith said. “If you avoid that transition to IP for all the content, the DVR playback is a unicast stream,” he commented. “You are putting some parameters around what you convert so the enormity of those storage costs could be minimized. You aren’t replacing a DVR that is working just fine and that people are paying for.”

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